Facebook Blogging

Edward Hugh has a lively and enjoyable Facebook community where he publishes frequent breaking news economics links and short updates. If you would like to receive these updates on a regular basis and join the debate please invite Edward as a friend by clicking the Facebook link at the top of the right sidebar.

Wednesday, February 05, 2003

German Unemployment at Five Year High

As if to confirm my recent preoccupation about what is happening in Germany, these latest figures paint a pretty grim picture:

German unemployment rose significantly more than expected last month in a further sign of the gloom overshadowing the eurozone's biggest economy. Seasonally adjusted unemployment jumped by 62,000 month-on-month to reach 4.27m, or 10.3 per cent of the workforce. The unadjusted figure, which is more closely watched in Germany, soared by almost 400,000 compared with December to reach 4.62m - the highest level in five years. The figures showed a particularly steep climb in western Germany, normally seen as a more accurate barometer of the economy than the economically depressed east. The Federal Labour Agency said on Wednesday that seasonally adjusted unemployment in the west climbed by 46,000 to reach 8 per cent of the workforce. In the east, the jobless total rose by 16,000 to reach 1.6m, or 18.2 per cent of the total.

This week's electoral routs have pushed the SPD-led coalition government into intensifying calls for economic and social reforms to boost the labour market and reduce the financial pressures on the stretched welfare state. However, in the short term, the sharp rise in unemployment will most likely hit private consumption, while raising the funding pressures on the welfare state. In particular, the sharp increase could make the government's budgetary goal of eliminating subsidies for the state unemployment insurance scheme more difficult than ever this year. "The implications are straightforward", said Holger Fahrinkrug, eurozone economist at UBS Warburg in Frankfurt. "Today's data exert more downward pressure on German growth forecasts, especially for private consumption, and increase the pressure on the budget".
Source: Financial Times
LINK

Eastern Europe Economy Watch

United States

Edward's Website

About

Edward 'the bonobo' is a Catalan economist of British extraction based in Barcelona. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

He is currently working on a book with the provisional working title "Population, the Ultimate Non-renewable Resource".

Apart from his participation in A Fistful of Euros, Edward also writes regularly for the demography blog Demography Matters. He also contributes to the Indian Economy blog . His personal weblog is Bonobo Land . Edward's website can be found at EdwardHugh.net.